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C O N F I D E N T I A L SECTION 01 OF 03 DHAKA 000502
SIPDIS
SIPDIS
FOR S/CT COORDINATOR DAILEY FROM AMBASSADOR MORIARTY
E.O. 12958: DECL: 05/04/2018
TAGS: PTERPRELPOGVECONEAIDKCORBG
SUBJECT: BANGLADESH SCENESETTER FOR COUNTERTERRORISM
COORDINATOR DAILEY
Classified By: Ambassador James F. Moriarty, Reasons 1.4 (b) and (d)
------------
SUMMARY
------------
¶1. (C) Your visit to Bangladesh comes at a critical juncture
in the Caretaker Government's term. The Government has begun
a dialogue with the political parties to set the stage for
parliamentary elections by the end of 2008, to
institutionalize reforms initiated after the Government came
to power in January 2007, and to ensure the Government's safe
exit following elections. Imprisoned former Prime Ministers
Sheikh Hasina and Khaleda Zia maintain great influence in
their respective parties, despite ongoing factional fighting
between loyalists and so-called reformists. There are
increasing calls for Hasina and Zia to be released from
prison. Many are suspicious about the Army's political role
and criticize its interference in the internal affairs of the
parties. Others fear a return to the status quo ante, and
the violent "winner take all" political culture. Underlying
this fragile political and economic situation is the fact
that Bangladesh remains a potential safe haven and transit
hub for transnational terrorists because of its porous
borders and limited law enforcement capacity. Your visit
will help reinforce bilateral cooperation in combating
terrorism and extremism. END SUMMARY.
-----------
DEMOCRACY
-----------
¶2. (C) The Caretaker Government (CTG) came to power in
January 2007, the day after a State of Emergency was declared
to quell political violence that was spinning out of control
in the run-up to parliamentary elections. The CTG, made up of
11 non-political advisers and strongly supported by the
military, cancelled the elections and began cracking down on
endemic political corruption and violence. The crackdown
initially won broad public support, but frustration with the
Caretaker Government spilled onto the streets in late August;
at that point a dispute at Dhaka University between students
and soldiers became a rallying point for thousands of
Bangladeshis disaffected by inflation, other economic woes
and restrictions on political activity. The Government
stopped the protests by imposing a curfew backed up by a show
of force from the army. Government leaders acknowledged
privately to us and others the need to stick to the elections
roadmap, to open up political discourse, and to communicate
more effectively with the public.
¶3. (C) Bangladeshis welcomed an easing of the ban on
politics and the initiation of formal dialogue between the
Election Commission and the parties on political reform in
September 2007. The relaxation of the ban threw internal
party disputes into sharp relief. The most visible struggle
is within the Bangladesh Nationalist Party (BNP), which
governed the country from 2001 to 2006 under former Prime
Minister Khaleda Zia. The Awami League, the other major
party, has also experienced internal strife between reformers
and loyalists to former Prime Minister Sheikh Hasina, but has
maintained a public show of unity. Army Chief General Moeen
Uddin Ahmed repeatedly has stated that he has no political
ambitions, even as he assumes by default a higher public
profile than the Chief Adviser, who is the top official in
the Caretaker Government. General Moeen's term as Army Chief
recently was extended by one year, to June 2009.
¶4. (C) The Caretaker Government marked its first anniversary
in January with a broad shake-up. Five widely respected
Bangladesdhis took the place of advisers who resigned under
pressure after a series of missteps contributed to the
Government's eroding popularity. Five special assistants to
the Chief Adviser also have been named to help the overworked
Council manage its ambitious agenda. These changes have
helped make the Caretaker Government more effective, but the
Government remains weak.
¶5. (C) In the midst of the political jockeying, voter
registration continues in preparation for national elections
promised for no later than December 2008. While the mechanics
of holding elections seem to be largely on track, there is
still much debate about an "exit strategy" for the Caretaker
Government and the military, who want to ensure a newly
elected government maintains reforms and refrains from
DHAKA 00000502 002 OF 003
settling scores. They fear retribution from a resurgent
political class that has been the main target of the
anti-corruption campaign.
¶6. (C) The Government has begun a dialogue with the
political parties, but the two sides have yet to resolve
major stumbling blocks in the way of establishing a basic
framework for elections and transfer of power. Corruption
cases against the two former prime ministers have languished
in court for a multitude of reasons, including legal manuvers
by the lawyers for the accused and apparent difficulties on
the part of the Government in effectively marshaling evidence
against the two ladies. The result is that the Awami League,
the BNP and at least one other political party have demanded
the release of the imprisoned former Prime Ministers in the
course of the political party dialogue with the Caretaker
Government. At the same time, there is much speculation
about the role of the Bangladesh military in engineering the
dialogue and its outcome.
-------------
DEVELOPMENT
-------------
¶7. (C) Bangladesh's largest rice crop of the year is in the
early stages of harvest. All signs point to a good crop,
which will help augment the country's declining food
stockpiles, drawn down radically in the wake of Cyclone Sidr
and two floods in 2007. However, inflation, particularly of
food prices, remains dangerously high for Bangladesh's
desperately poor population, 84 percent of which subsists on
less than $2 a day. Millions of Cyclone Sidr victims remain
in need of food, shelter and livelihood support. The
Government of Bangladesh and international donors have not
sustained the strong levels of assistance they provided
victims in the cyclone's immediate aftermath. The Government
has criticized the international community for failing to
follow through on promises to assist Bangladesh with
reconstruction efforts.
¶8. (C) Energy development and high fuel prices also are
major challenges for the Government of Bangladesh. The
Caretaker Government has continued the policies of previous
governments by heavily subsidizing fuel and fertilizer
prices. While the Government recently raised the price of
compressed natural gas (CNG), it will leave for its successor
significant debts as a result of the subsidies. Most experts
agree the subsidies must be eased gradually or better
targeted, though they recognize the likely political fallout
of exacerbating inflation. The Caretaker Government has
taken small steps to address the nation's severe energy
shortage, including by soliciting bids for offshore oil
exploration, but Bangladesh's expanding energy needs continue
to outstrip supply.
¶9. (C) Investors remain skittish, due to the Caretaker
Government's anti-corruption campaign (which targeted
entrepreneurs as well as politicians), the uncertainty
surrounding the transition to a new government by the end of
the year, and doubts about the Caretaker Government's
capacity to push decisions through its cautious bureacracy.
Public perceptions of the Caretaker Government are at an
all-time low, particularly with regard to economics. In a
survey conducted in March by The Asia Foundation, 80 to 90
percent of Bangladeshis surveyed said they were worse off
economically under this government than under the previous
one. Economists estimate GDP growth in Bangladesh this
fiscal year (July 2007-June 2008) will fall to 6.0 percent or
below, from last year's growth of 6.5 percent.
-------------------------------
DENIAL OF SPACE TO TERRORISTS
-------------------------------
¶10. (C) Although Bangladesh is a moderate Muslim-majority
nation, its porous borders -- particularly its maritime
borders -- make it a potential transit point and safe-haven
for terrorists. The USG funds many programs in Bangladesh to
counter terrorism, including a wide range of training under
the Anti-Terrorist Assistance program coordinated by the
State Department. USAID and Public Affairs Section programs
also address root causes of extremism through outreach to
leaders of influence, including religious figures, and to
madrasas. Human rights concerns have prevented the USG from
engaging the paramilitary Rapid Action Batallion (RAB), which
is the lead counterterrorism force in Bangladesh. RAB's
DHAKA 00000502 003 OF 003
record has improved under the Caretaker Government; during
the first two weeks of March the United Kingdom provided
human rights training to build on that positive trend.
¶11. (C) Bangladesh continues to arrest alleged members of
Jamaatul Mujahedin Bangladesh (JMB), the banned Islamic
extremist group responsible for a wave of bombings and
suicide attacks in late 2005, and to recover bomb-making
materials and weapons from their hideouts. Those arrests,
along with the execution in March 2007 of six senior JMB
leaders, appear to have depleted the organization and left it
rudderless. Earlier this month, the Secretary of State
designated Harakat ul-Jihad-i-Islami/Bangladesh (HUJI-B) as a
Foreign Terrorist Organization and as a Specially Designated
Global Terrorist. The designation elicited minimal public
response from the government and society at large.
¶12. (C) Bangladesh's legal framework to address terrorist
finance remains weak. It has neither an anti-terrorism law
nor an anti-terrorism financing law. We have concerns that a
revised anti-money laundering law may not be fully compliant
with international standards, and we are working with the
Government to amend the legislation. We continue to work
with the Government to help develop a Financial Intelligence
Unit in the central bank.
--------------------
YOUR VISIT
--------------------
¶13. (C) Your visit coincides with that of Assistant Secretary
for South and Central Asian Affairs Richard Boucher. You
should emphasize the importance of continued bilateral
cooperation in combating terrorism and extremism. You also
should underscore the importance of adherence to
international standards of human rights and due process,
including in the pursuit of terrorism suspects. Strict
adherence to human rights norms will remain a key component
for future USG assistance, including potentially the RAB.
You should voice USG support for a peaceful transition in
Bangladesh by the end of 2008. You can commend the Caretaker
Government for its work in tackling Bangladesh's endemic
corruption, which creates a fertile environment for
terrorism, while noting the importance of due process in
prosecuting those suspected of corruption.
Moriarty